Analysis of transactions in the GBP / USD pair
The test of 1.1876 occurred at the time when the MACD line went down quite a lot from zero, which limited the downside potential of the pair. Some time later, another test took place, but this time the MACD line was already recovering from the oversold area, which seemed like a great idea to buy. However, it only led to losses as the pair continued to decline. Buying on a rebound from 1.1802 also did not bring much result.
The forecasts of the UK Treasury led to a slight decline in pound, however, it was bought out very quickly in the afternoon. Ahead are retail sales data in the UK, and if it shows growth, demand will surge, which will keep the chance for a breakthrough to the monthly highs. Statements by MPC member Jonathan Haskell are unlikely to affect market direction.
In the afternoon, the US will release a report on home sales in the secondary market, but it will not have much impact on dollar. If pound buyers fail to get above 1.1920, pressure will return in GBP/USD by the end of the week.
For long positions:
Buy pound when the quote reaches 1.1916 (green line on the chart) and take profit at the price of 1.2004 (thicker green line on the chart). Growth will occur if there is strong economic data on the UK. But remember that when buying, the MACD line should be above zero or is starting to rise from it.
Pound can also be bought at 1.1876, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1916 and 1.2004.
For short positions:
Sell pound when the quote reaches 1.1876 (red line on the chart) and take profit at the price of 1.1802. Pressure may increase if UK reports are disappointing and Bank of England officials say they need to slow down the rate hike. Take note that when selling, the MACD line should be below zero or is starting to move down from it.
Pound can also be sold at 1.1916, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.1876 and 1.1802.
What's on the chart:
The thin green line is the key level at which you can place long positions in the GBP/USD pair.
The thick green line is the target price, since the quote is unlikely to move above this level.
The thin red line is the level at which you can place short positions in the GBP/USD pair.
The thick red line is the target price, since the quote is unlikely to move below this level.
MACD line - when entering the market, it is important to be guided by the overbought and oversold zones.
Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.